The Business Rusch: Beginning Writers (Changing Times Part 16)
The Business Rusch: Beginning Writers
(Changing Times Part Sixteen)
Kristine Kathryn Rusch
I have done everything I could possibly do to avoid writing this post. I wrote extra long on the novel today, cooked a more elaborate dinner than usual, did the dishes, and even paid one entire month’s worth of bills—including things that won’t be due for weeks—just to keep away from my office.
Now, about an hour before my brain officially clocks out for the evening, I am sitting in my office, wondering if I should organize my library—all 10,000 volumes of it. Yep, I’m a living example of avoidance tactics.
Why? Because seventeen weeks ago, when I started this mini-series on publishing, I deliberately placed the section on beginning writers at the end. I figured by the time I got to that section, I would know exactly what to say.
As you can tell from my behavior, outlined above, I don’t. Not exactly. In fact, I’ve been discussing this particular topic with professional writers who are savvy about the changing publishing world all throughout January. At our weekly professional writers’ lunch on Sunday, we discussed the impact of the changes on the way that beginning writers should behave, sometimes with raised voices.
Honestly, none of us have good solutions. The change is too swift.
Last October, I would have given this advice: beginning writers should market their unpublished book for two or three years in the traditional publishing arena before turning to self-publishing. My husband, Dean Wesley Smith, would have told beginning writers to self publish and to make a print-on-demand book, which they should then market instead of a manuscript. He believed that editors would find the bound book more attractive. I didn’t agree at the time.
Dean’s opinion has remained relatively unchanged. Mine has gone through iteration after iteration. Somewhere in December, I decided he was right. But as the new year has progressed, I’m beginning to wonder if he’s too conservative.
Okay, here’s the disclaimer: If you’re new to this blog—particularly if you’re a beginning writer—please reread the previous fifteen posts. The important ones include the overall overview post, the overview post on writers, and the posts on Big Publishing. If you don’t understand how the publishing industry works (and believe me, most established writers don’t, so I don’t expect beginners to), then what I am about to say will make no sense.
The paths are pretty clear for bestselling writers and midlist writers. Even though I wrote my first post on bestselling writers two months ago, I stand by my statements then. Big Publishing is set up to handle huge numbers. If you want a one-day lay down of a million copies of a single hardcover book across the United States, the only way to do that is through Big Publishing.
Big Publishing does bestsellers better than anyone else can, especially repeat bestsellers. If you have hit the list once through Big Publishing, then they know how to ensure that you will do so again with your next book, provided that said book is similar to the first. Got that?
Established midlist writers may decide to stick with Big Publishing as well, not just for the opportunity at a bestseller, but for a wide lay down and promotion outside the easily available channels. But established midlist writers probably have backlist titles with a built-in audience that can be self-published to take advantage of both sides of the marketplace.
As I mentioned in the posts on midlist writers, established midlist writers are best suited to take advantage of this new publishing world.
Beginners, though. I’m not sure where beginners stand.
Big Publishing has figured out that the emerging e-publishing markets are going to be huge. Despite what the gloom and doomers say, Big Publishing will not disappear. (See my earlier posts on this before arguing with me, please.) There will be some visible bumps as Big Publishing adapts to this new world, but Big Publishing as a whole will survive and will probably become healthier because of the changes.
We’re already seeing the indications. Book covers, which take a year to produce, have moved to large imagery and big words, things that look good at the postage-stamp size needed for e-books. Book contracts are changing in dramatic ways. Now publishers want world rights instead of North American publication rights as a matter of course, and that makes tremendously good business sense for the publisher. It’s getting harder and harder to separate out e-rights throughout the worldwide market. Amazon and Apple, for example, make publishers opt out of the worldwide English language market, which seems easy but usually takes two or three requests to achieve.
And if you don’t think that’s important, realize that most educated people in other countries speak and read English as a second language. For example, my English language sales in the parts of Europe where English is not the official language are nearly as high as my sales in England itself. Publishers want to take advantage of those markets because it’s so easy to do now.
(If you don’t understand what I’m talking about with rights—which is what writers sell [writers do not sell manuscripts or stories, they sell the right to use those stories in particular ways]—get thee a copy of The Copyright Handbook immediately. Do not pass go. Do not read any farther. Click on the link, order, and then come back to this blog.)
Also, in the past two years, Big Publishing has—as a group—decided that an author’s refusal to sell e-rights is, for the most part, a deal-breaker. I’m sure that James Patterson or Janet Evanovich could probably negotiate to keep those rights, but those of us without bestseller clout no longer can. Until early 2009, I could have kept e-rights to all of the novels I sold to New York publishers. I did not keep those rights on several because, quite frankly, I saw no point to keeping them. Publishers were the only ones attempting e-book publication in the early years of this century, and I simply saw it as another revenue stream.
Besides, the e-rights clauses in traditional publishing contracts were, by today’s standards, unbelievably generous. They were 50% of the gross sales. You can’t get something that good from traditional publishers now. Traditional publishers want to pay writers 25% of net or 15% of gross. I’ve seen amounts even smaller than that. And, when compared with the 30% to 70% of gross that a writer can get on her own for e-rights, those amounts offered by Big Publishing in their contracts are laughably small.
Out-of-print clauses are becoming draconian as well. Up until two years ago, e-publication did not count as being “in print.” Only paper copies did. So a book that was selling well on Kindle but had no paper copies could be deemed out of print under its contract.
No publisher would agree to that deal today.
And finally, advances have gotten terribly small, especially for beginners. In the past, it was unusual to hear of a beginning writer with a reputable agent getting $1500 as an advance for a novel. Now I hear about deals –or potential deals—like this every week. And the royalty rates are smaller, and some companies even base those royalty rates on net sales rather than a percentage of the cover price, so it’ll take a lot longer than expected to earn out even a small advance.
Even the beginning writers who are getting good advances aren’t getting the best deals. I know a number of brand-new YA authors who got $25,000 advances on their first novels, which is a wonderful advance for a new writer. But that advance was for a single book, where in the past, an author—even (especially) a beginner—would have received a multibook contract. Now publishers wait until they see how that first book does before signing the author to a second one-book contract.
So any writer who is attempting to build a career must wait two years from sale for the book to come out, and another six months after that to see accurate sales figures, before their publisher will even consider offering on a second book. That makes four to five years between an author’s first book and his second.
And that’s just plain ridiculous.
The few beginning writers I know who received multi-book contracts are often receiving terrible terms, terms that—even with a good agent or a strong IP lawyer on the writer’s side—are dealbreakers. Everything from the rights and out-of-print clauses I mentioned above to limitations on the use of the author’s name on other works and basket accounting (lumping all of the books under one contract into a single accounting system as if those books are one book—and no, I’m not going to elaborate. I just tried and it took 500 words, and that’s a side road which I’m not going to walk at the moment) have become standard dealbreakers in new writer contracts.
Before you all start screaming about how unfair traditional publishing is and how terrible it is that writers get screwed all the time, let me clarify a few things. First, writers generally get screwed because writers don’t understand what they’re signing. Writers are, as a class, ignorant of the business and that ignorance hurts them a lot more than any publisher ever could. No one forces a writer to sign a bad contract. The writer makes that choice all by himself.
Second, publishing contracts are a negotiation of the terms of a business agreement. Remember our set-up from previous posts. Traditional publishing models—which was, really, the only model until a few years ago—go like this:
Writers provide content (product) to Publishers.
Publishers distribute that content to Distributors.
Distributors distribute the content (books) to Bookstores.
Bookstores distribute that content to Readers.
Until 2009 or so, the only way for a writer to get his content to the biggest number of readers was to go through a traditional publisher. The contract terms defined how that content would get published, at what level it would go to the distributors, and how many readers it would (probably) reach. There are systems in a traditional publishing contract that pay the writer more if the book sells better than expected. And, in the past, if the book sold worse than expected, that book went out of print and the writer could get his rights to that book back.
It costs Big Publishing anywhere from $100,000 to $250,000 per title to send a book by a beginning writer into this system. So in the contract negotiation, the Big Publisher wants to ensure that the company will get a suitable return on its investment. After all, Big Publishing is investing this money before publication, and won’t receive its first payment on that money until 90 days after publication. That’s a lot of float. Imagine if you had to spend $250,000 today in the hopes of making a 4% profit on that $250,000 five years from now. Would you do it? Not many of us would. Yet publishers do so all the time.
Beginning writers have always gotten the worst contract terms in the business because beginning writers are an unproven commodity. Most beginning writers don’t earn any money for the company. Those writers are a gamble that often fails.
Why then do publishing companies continue to buy from beginners? In the hopes that those beginners will become a strong seller. In the past, the publishers hoped that the beginners would become a reliable midlist author, but in the last ten years, the publishers decided they wanted beginners to turn into New York Times bestsellers. That’s just not possible: it’s like trying to win the lottery with every single lottery ticket you buy. It’s a failing strategy, and the Big Publishers knew that. They just didn’t know how to get out of that strategy with the belt-tightening from the distribution collapse in the late 1990s (don’t know what that is? I mention it in the Big Publishing posts I’ve already pointed to), with the loss of the independent booksellers, and with the recession.
Big Publishers coped by those single book contracts and the bad-for-the-author multibook contracts I mentioned above. But that strategy was failing, and the Big Publishers knew it. They no longer had the budget to build beginning writers into solid midlist writers, and, it seemed, Big Publishers forgot that solid midlist writers often became bestsellers, given enough years and enough books.
Enter e-books. Suddenly the Big Publisher could invest in a beginning writer. If that writer’s first novel failed, then the Big Publisher could discontinue the expensive paper edition of the book and keep the e-book in print forever, eventually repaying that $250,000 loss that was already on the books.
From Big Publishing’s point of view, that change is a godsend. It means that Big Publishing—with the proper contract—can develop new writers into midlist writers again. Big Publishers can take more risks than they used to, and they can once again hope to get a good return on their money.
But it’s not a good deal for the writer, especially if the writer is a slow writer. Because here’s the reality of the contractual changes that are occurring at all levels of the business:
Once a book sells into Big Publishing, that book will remain in the Big Publishing system for decades. Writers will no longer be able to reclaim their backlist the way that midlist writers have done for generations. Once a book sells into traditional publishing, it will remain a part of traditional publishing. Which means that, eventually, the writer will earn out his advance, and will make $10, $20 or $30 extra dollars per year on that book. Because, remember, e-publishing clauses in those contracts offer only tiny royalties now, and those royalties are getting smaller, not larger.
This is a disaster for the slow writer. Because that writer will never make a living at writing. In the past, the slow writer retained foreign rights as well as audio rights and other auxiliary rights to his novel. If the novel was well received, then the writer would make money selling that book to other countries, even if the book went out of print in the United States. The auxiliary rights often kept the slow writer alive as he wrote his next book.
Plus he probably had a solid multi-book contract from his publisher that guaranteed the slow writer would earn $5,000 to $10,000 in the two years while he wrote the next book. Combine that with the foreign rights sales, and the writer earned a small living–$15,000 to $25,000 per year.
Now let’s be kind to that same slow writer. He sold his first book for $25,000, but that sale was for world rights. He will receive all of his money by the time the book is published, and will not even be eligible to get an offer on the next book for another six months. The money from any foreign sales will go against his advance instead of into his pocket. Even if he sells his next book for the same $25,000, he will have two or three years in there with no writing income at all.
If our slow writer sold a multibook contract, he’s probably only earning $5000 to $10,000 per book, and again, without the foreign sales or the auxiliary rights, that’s all his earning. There’s no chance this writer can quit his day job.
The writer’s only chance is to have his book do better than expected. However, some multibook contracts I’ve seen that have been negotiated by young agents (those who came into the business in the last ten years) are so badly done that the advance is the only money the writer will ever see on that book even if the book becomes a New York Times bestseller. Is that the agent’s fault? I suppose you could blame her. But seriously, that’s the writer’s issue. First, the writer signed that P.o.S. contract, and second—and more importantly—the writer hired that crap-ass agent in the first place. By the way, all of these terrible contracts that I’ve seen have come through established agencies, so even if the agent works for a reputable firm that’s no guarantee the agent will do a good job on the contract.
In other words, having an agent—even one in a reputable firm—is not a guarantee that a beginning writer (or any writer for that matter)—will get good contract terms. And, to be fair, good contract terms are becoming harder and harder to get.
From the publisher’s point of view, it makes sense to sign the writer to a hard-to-break long term contract, and to wrap up as many rights as possible. In a changing world, it’s better to negotiate for everything than find yourself with nothing.
That’s what happened to publishers with established midlist writers. Publishers found themselves with nothing. Established midlist authors like me got contract terms in the 1980s, 1990s, and the early part of this century that enable us to get out of those contracts easily, that now put our backlist into our own hands. Publishers realize they’ve lost this gold mine. They even sued to try to hang onto that gold mine, trying to define terms in contracts that predate the electronic revolution to include electronic books. Those suits failed repeatedly in court.
Publishers are very well aware of what they’ve lost, and like any good businessperson, they want to ensure they don’t make that same mistake again. So they’re buying up everything they can for as little money as possible. And they’re being harsh about it. Right now, they know that for every writer who turns down a publishing deal, another writer waits in the wings.
Everyone who isn’t a bestseller and signs a book contract with traditional publishers these days is paying for this change. If the writer goes into a traditional publishing deal with eyes wide open, looking at the deal as a partnership to get the book into traditional outlets, then that deal is just fine. Especially if the writer realizes that the book is probably never going to be declared out of print.
Some midlist writers will have enough clout or enough savvy to negate the worst of the new contract terms. But most writers won’t. And beginners who are notoriously naïve and terribly desperate to get their first publishing deal often don’t negotiate their first contract at all.
Therein lies disaster, but it’s a disaster that has existed since the first publishing contract was drawn up. Beginners usually get screwed, badly. That’s just the way of things.
But that way is starting to change, and not just within traditional publishing. There are whole new ways to get screwed in the world of print-on-demand and e-publishing. And I will deal with some of that next week.
Since many of you will want to know where I’m going with all of this, let me give you a rough outline of the next few posts, all of which will focus on new writers. I’m going to deal with the new alternatives to traditional publishing. I’m also going to deal with the scams and the pitfalls in new publishing as well as traditional publishing. I’m going to explain which type of new writer will thrive in the modern publishing environment and which type of new writer will get eaten alive.
As my well-published friends pointed out on Sunday, a subset of new writers have always gotten eaten alive in publishing. In the past, it was a predictable subset. My well-published friends believe it will be a different subset who will get eaten alive in this new publishing environment.
I don’t want anyone to get eaten alive. (I’m so nice that way.) So I’ll put out ways to avoid getting hurt in the hopes that I can save a few of you from getting your dreams crushed.
Because the flip side of this is that a whole new subset of new writer will thrive in this publishing environment, a subset that was virtually shut out of traditional publishing in the past.
And now—as in the past—the writers who will survive through all of the ups and downs of publishing are the writers who understand the business of publishing. So if you’re a new writer who doesn’t like business, get over that aversion now or prepare to have a day job for the rest of your life. Study up, my friends. Because, to paraphrase Bette Davis in All About Eve, it’s going to be a bumpy ride.
A number of you have been waiting for the beginning writer posts and as with all of the other posts, I’m going to take on this topic in parts. Your comments, e-mails, and donations will keep me writing this, even though I would rather be cleaning the cat box. (Actually, I’d rather be reading, but that’s another story.) So thank you for all the good thoughts, and see you next week.